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Shrinkage – and no end in sight: in the first quarter of the year, the European banks once more saw revenues and costs alike decline compared to 12 months ago (-2% each). Non-interest income was particularly weak. As a result, profitability dipped, with loan loss provisions also rising, albeit from very low levels. Banks tried to make up for the revenue loss by taking more risk and expanding their balance sheets. Total assets and risk-weighted assets both increased by 4%. Consequently, the average CET1 capital ratio fell 0.4 pp yet remained in comfortable territory. [more]

Still on a diet: European banks continue to retreat

Jan Schildbach

Shrinkage – and no end in sight: in the first quarter of the year, the European banks once more saw revenues and costs alike decline compared to 12 months ago (-2% each).